If you’re placing morbid bets, then put $50 on red for Wachovia. The recent collapse of Washington Mutual has folks worried about Wachovia. Wachovia’s stock is down 45% for the week, and 27% today as bailout.
Still, WPP’s Ogilvy & Mather has just picked up the pre-crisis estimated $150 million creative and media advertising account. Maxus, Neo@Ogilvy and Soho Square will handle media. The shop beat out Lowe and Universal McCann; Merkley & Partners and OMD. In the final round, Ogilvy crushed WPP sibling Young & Rubicam. Incumbents were Mullen and Carat.
Federal regulators now have their eye on Wachovia. Despite being in better shape the WAMU overall, Wachovia has $122 billion in risky mortgages. Plus, Barron’s has said that “the cost of protecting $10 million of Wachovia credit soared to 24.5 percentage points upfront, plus 500 basis points per year, from about $670,000 a year on Thursday.” This is not a pretty picture.
Oh wait! There’s more. Morgan Stanley has also stolen some of Wachovia’s top private wealth management representatives from Wachovia Securities to work in its New York-based office. The fellas probably smelled the rot of a sinking ship and got while the getting was good. That is only one small reason why Morgan Stanley backed out of merger talks with Wachovia on Wednesday. The end is near! The end is very near!
Wachovia will be releasing a statement about all this, the advertising agency switch, not their financial, sinkhole soon. Stay tuned.
More: The 7 Realities Of The Investment Banking Crisis For The Advertising Industry